SREN.SW - Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, welcome to the Nine Months Results 2022 Media Conference Call. I am Alice, the Chorus Call operator. I would like to remind you that all participant will be in listen-only mode and the conference is being recorded. The presentation will be followed by Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. my Relations hand and it’s Logutenkova, to time, Media Head, Corporate this pleasure over to Elena At Reporting. Please go ahead, madam.

Elena Logutenkova

good to and and will With for you a Thank our then CFO, John today we and morning, overview you. will you Group turn Thank that, you, give who for by media our call questions. I of nine take XXXX. results brief your Dacey, months over am joined everyone. joining the results

John Dacey

morning to good Thank and you, everyone. Elena,

nine in an first surge the natural by war XXXX multiple challenges, marked The the claims, months were the in of in catastrophe the in and particular, increase turbulence inflation markets, Ukraine. financial in

in we As we $XXX of Group was outlook, million with the million, key reported which loss by we loss in pre-announcement confident net particularly Nevertheless, third a ago. a encouraged two weeks several indicated quarter for result, midterm $XXX our the remain The the period. developments.

Health Solutions their both year. targets Reinsurance meet First, and for to very and are well are track Corporate Life the on and performing

This to X.X% a at into and in trajectory income achieved is recurring the If to capital in nine renewals increased months profitability SST an rising to the lever seeing contribution yield, impact in with the the higher of from to reinvestment year be management remaining last of quarter, of yield. positive third and capital effects X.X% And compensate a we $XXX yield which Group our the the committed of capture of quarter. us of this forward. the of rates, first Xst going The of yield in strong, our July the we around portfolio markedly we while are Group’s income for will clear. already very opportunities the Second, for fixed remained income million fixed are the period position upcoming as the quarter third, translates the enables XXX% the XXXX. for group interest This XXXX inflation to from helping same our ratio increased increase a year-on-year important X.X% recurring profitable recurring alone. third X.X% look priorities. it In

Now the the for hailstorms natural a and Casualty reported individual higher natural Australia let large for other billion, businesses. $X.X first catastrophe of the in and nine me period investment net to expected mainly and lower turn premiums At South the XX.X% ratio to than impacted in in than Due to catastrophes months normalized $XXX XXXX, Africa, to unlikely results loss related floods economic as of was inflation, by in Property smaller business the Reinsurance France, increased a well and midsized rates, its million were target stable by Hurricane Calculated events earned Ian, as reach of is increase period. claims claims, net results. slightly exchange series around premiums small in price combined XX% the and in in earned mostly and combined less world. foreign billion, driven to of the an XXXX. increase ratio continued P&C at improvements. by to amounts X.X%. supported Net normalized $XX.X the Re’s

segment Reinsurance, of months reported million income nine and to Turning XXXX. Life Health business for $XXX first the the a of net

to its amounted is third $XXX target foreign billion. nine-month amount exchange premiums strongly at increase this and to claims X%. year. Re period and the impacted remained stable approximately by in unchanged first income $XX.X first million profitability track Calculated largely business quarter. Life earned of second quarters vast plus to of $XXX Health claims, investment Net the the While premiums earned quarter in the net was returned and Overall, for despite to XXXX. meet the results significantly lower in with in COVID-XX-related a majority income rates, million, COVID-XX fee the of booked at net on XXXX

reached. continued mid-term Re performing by and XX% we the I’d questions. million Now nine Solutions XX.X% earned portfolios, to while $X.X sum Corporate the outlook large foreign of continuous written hand favorable for the achieved business period, all strategy at income puts first rates, $XXX in to realized committed businesses manage being previously its was $XXX constrained to our the months regions. of P&C of by been the a The gross back earned other first rising amid of capitalization has although finally, of improved position to Ukraine the growth ratio war elevated to impacted continued Group targets in around less the in claims Solutions, by XXXX and are on related net well. increases. reserves achieved We Elena earn-through with protection despite with the results resilience solid than that, see in of at Hurricane X.X% strong up, Compared new catastrophe confident growth targets, trajectory. to for premiums focused In increased stable increased demand let selected XXXX in me and are amounts of business prices and are underlying and months in months world, results. target by nine iptiQ the premiums a touch year of unit And million full is for Ian. risk growth rate Calculated also nine us it the to to Corporate renewals And and remain reach unlikely along premiums all well activity, with XXXX the profitability increase net on upcoming the iptiQ losses, including track We the Group market increased natural year looking very XXXX, its combined first our Net confirmed To driven to of like XXXX. the business prior to dynamic business X.X%. the billion, be across to exchange the the achieved XX%. capacity.

Elena Logutenkova

John. you, Thank

Operator, open now could line questions. the take first question? for will please the We you

Operator

Instructions] first from Market Dyson comes of Please ahead. Global Intelligence. S&P Ben [Operator go line The the -- Market question with

Ben Dyson

catastrophe back? Hi. wanted your going I that any prompt figure question. given $X.X And I you to to you ask that Florida, Good Thanks the Yeah. gave, whether particular. in loss Ian continue development my to was cutting to going to think really specifically of companies around morning. the experience expecting in develop just any given approach grow or your billion just whether that was claims in quarter can just certainly Swiss and for in others one was catastrophe catastrophe reinsurance Hurricane taking year the while Re in question a second that were just in are change

John Dacey

Thanks for the question, Ben.

the natural was estimate the me very reserved the exposures our feel Let we catastrophe. fairly limited. $X.X well-developed actual the information before losses We question actually reserves up the occurred from two to hurricane limited prudent and put today, of clients that and marketplace. in very that, have about fact the result, days the and we position. information coming start are comfortable. respond that is believe month billion Having third potential primary one the the with will matter broader then insurance a ago We given the I the Ian that The and a is quarter, quarter end said both of exactly to we models our as from only use from

and $X.X positions. this committed future at within specific capacity to respect more that the cost sometimes yes, in loss, We and in retentions need billion that these be to to We referred in think remain the are segment the in identified. work of our industry our cover lawyers trying Swiss the with alluded part of range originally around has You the With to just pricing comes Re’s than quarters. and as creep loss, is skin but to flood considerably an what of strong that we been the some the clear in we the billion in to assume. to Florida, to question of get market in But the to wind clients of very in out billion, reality for right reinsurance factors recent our catastrophes, is recoveries clients. the of general, to sharing the to for our that North the both has prepared renewals some loss uncertainty important these providing made right remain the the intervention an is that around be adequate of that game to and a primary an broader price between and structures where is business. on increase believe between put reflect this and reality terms particular, But over risk caused of we likely $XX think adjustments Swiss all losses we there to adequate natural that XXXX committed which the sure that much the world. we storms in risk of clients is that not are distinction coming loss the and Re of through $XX America We

Ben Dyson

very Okay. Thank you much.

Elena Logutenkova

please? Thanks and question, let’s next take

Operator

next from Please the [ph]. Hoffman go AWP ahead. of Mark with The line question comes

Unidentified Analyst

side. also You initiatives? of do and that secondly, renewals, in side, P&C you Yes. more give that risk more to you the there future? million related see to Good expect? in capacity the the cost And the do morning, Is and trying the January John. My have market, took probably inflation that what the question you growth on this said some mainly evolving are $XXX already growth costs goes January and to on expect claims you to on first, your into you

John Dacey

Sure.

owners would companies the obvious will actually overall in dislocation in I your broadly that space. that’s specifically. catastrophe required clear that in a protection first will of question, has exposures What the meaningful moment, the exposure. not a it’s around market increased from that other we increased like reinsure. to world, is any we true way committed values this the think, which companies and primary will I and increase among their amount increase participant It’s just on And amount inflation, reinsurance in our asset see a of the reference by asset we natural So, things be those primary

industry the willing material as I forward, and and been retentions go we in reinsurance a last by pricing with increase increase work But would companies primary expect forward. I the The years. risks the has challenged would clients expect will in the of appropriate are that five move material of prices. economics acknowledge risk we the over we to As underlying that a

discussions the just we that better to our that in it’s believe write, of therefore, price all but reflecting clear require the would clients appropriate returns we are, in I on unhappy likely we ways, with think business expected that people is some increase reality, this to not with some expect the are and moment. amount but leave

So see Florida the and market, renewals expect. the we will X to respect will go, but be touching it where especially with broadly speaking anything I challenging, January

we replacement of On frankly, ultimate more loss This the observers, to costs the inflation costs generally, just not repairs since costs to the I to for at picked a reserves year, the our ahead that those adjusting also stay XXXX, the you continue we further in been replacements, cost good in required, of is what expected experience, go right but if CPI we based and been series has own adjustments factors, and is up what comfortable the this materially. businesses. This that appropriately we view inflation, starting of inflation including of in we rather repair forward assumptions of other our fact than all to some been part XXXX. wage be these will we comfortable increased think, in markets last ultimate reflects one economic overall very of are adjustments of we accounts lot where to will and feel are will Clearly, have and for the reflect are that increasing now monitored, the are sector, be to make shape. A earlier going even dimensions and of material are of Property are higher actual see the than our insurance we inflations it’s the on obvious, making end that them, adjustments, the and be with are. we motor are game. as beginning systematically might up the but have in actually but that

Unidentified Analyst

you. Thank

Elena Logutenkova

Mark. you, Thank

take Let’s question, next please?

Operator

ahead. line [ph]. of Please with the question from go Rico comes Miller.ch The next Kochar

Unidentified Analyst

and morning you very three questions. Good small much Thank my I Hey. have questions. for having

equity, How $XX.X XX% an with down one you to your in level? billion. billion equity That’s to The single-digit its operate dollar would a like the question. on first is, first looking

one business, you any do SST the you one, nat reinsurance little And capital signals increase? second and also plan is, about a The it the cat bit behavior everything sign year this little business. is must bit at the you results can nat evaluate so in models, -- third but say the cat okay models cautious look this Ian, more with for Hurricane a the writing be when

more? this So -- evaluate model bit that can a you view little

John Dacey

so the in questions order. Rico, me through let go Sure,

the You this have sheet. $XX to U.S. come accounting down we are The the side makes equity on of a basis, absolutely GAAP framework adjustments On correct. shareholders’ is, reality reported balance about billion. asset

a portfolio that certainty. have is as interest So lower income we up, rates fixed valued when mathematical the go

in We the our assets liabilities does slide need. actually indicates not we will that shareholders’ But that new think of duration we comfortable we corresponding XXX%. way in reflection that capital our in of not equity in we basis matches. that moving XX the accounting are above off at the January that is about about economic money X, moving make ratio a in matching is accounting Unfortunately, our so that economic the And with very concerned in fact capital to why position of the that which precisely you don’t see the the capital the match balance business XXXX, SST as assets duration rate, robust both a that the we a that XXXX, the got which we reinforcing fact, the we have view adjust that the and a IFRS our to that’s for and for frankly, way. in at even have and have gives liabilities. regime, are that trying we we in the way we midyear liabilities context on standard the slide better it’s speculate then starting and us Since appropriate sheet will report credit are think to about,

as raises. So we any that, are a no very a very And second result answer, of quick comfortable or there. there’s capital your of indication question, consideration

a actually marketplace. got more have business the write capital to we We even attractive need in very

to models, about question last Your important we that don’t I model. have think, a it’s understand

whether of implications over risks, XXX catastrophe models the literally the any specific are the we specific seeing some constantly got climate loss seeing update exposures the particular inflationary reason are and on cost around have We the We for change based world. world. adjust these secondly, both to of further we of on the and one across any frequency And severity potential losses. impacts review

And are so adjustments those model continuous.

and we the was on after climatic huge properly not and I related realities. think damage impact XXXX, be the XXXX that based Japan great a to example the flooding of in would wind in saw typhoons modeled

companies more primary our explain their they work to and why And be get we us. those to new market with and why the well us we made that expensive very to to in performed going a helped primary reinsurance adjustments, has them equilibrium, was subsequently as which to needed more for charge well so

seen now Right it’s America, unknown, Category with of big that respect with winds have on we kilometers storm. hour a we those what will if So now, needed Ian, X that’s very to an not North say windstorm adjustments. based something XXX hurricane make in there’s but is with a Hurricane I’d

be It’s should sure will chunky a have a going-forward people. the loss year. surprise a a quarter. we And big a so the loss billion-plus It’s get our to we received It’s through a surprise us. is pricing $XX the this industry to primary fact from in and the for not But not make the basis on appropriately. risks that that that reflects clients loss this

Unidentified Analyst

much. very Very interesting. Thank you

Elena Logutenkova

you, Thank Rico.

Let’s take please? the question, next

Operator

The Finanz Hengartner ahead. next Please Thomas question with of the und Wirtschaft. go [Operator from line Instructions] comes

Thomas Hengartner

you $XX Good year $XX morning. and your just billion that dividend down Yes. papers. The share said was about that is Equity per to CHFX.XX. mentioned calculated that’s last you around, in

dividend I wonder that for capital year?. position CHFX.X allows next your whether So a further

John Dacey

Yes.

been our is first to remain objective clear have a company. management we So very The very well-capitalized right? capital framework, in

we point the think and I our again, of absolutely case, capital believe that’s in is our the economic reference SST correctly reflected ratio. that’s

we We not so second any see capital major we that some very advantage writing is that what work of in may The to and peak will new a can business. do take we feel attractive marketplace. allow other constraints be specific than think risks there us put opportunities is to

to again, the that targets of basis and see at least for The on maintaining or our we reconfirmed any dividend XXXX, indications to financial businesses outlook an signal. our reason where and is increase have dividend, maintain third don’t the reevaluate we that would economic

rates point forward. The range put compares above So out not SST fixed losses in fact -- implications don’t do time, to which lead this some, income consider, think capital the again, there, we we to should go trade are of created increase might because the frankly, well that rates, the think increase on range, be the I part is reporting of credit U.S. cards. at has the likely the the those in XXX% our initiatives interest top capital shareholders reason adjust as But believe moves. moment XXX% to at I the extraordinary GAAP and a the take that is well our don’t there have GAAP which portfolio, additional this I to we U.S. in think suspect XXX%, has capitalized, to unrealized be that we therefore, the that we in returns in interest has I to ratio could issue we be necessarily. same -- don’t have increase cards of flexibility. is this in our capital to don’t think in SST for ratio. extremely that capital And assisted the We

Thomas Hengartner

you. Thank

Elena Logutenkova

you, Thank Thomas.

question, next take please? Let’s

Operator

Please with question line from comes Maria [ph] the Bloomberg. go next Haftonaya The of ahead.

Unidentified Analyst

Hi. Morning.

So better about hurricane in full still claims me. QX? XQ hit to you more bit coming for Is can a and year anything quick there tell just will guidance this get the with a for XQ your one are loss. for am you of a unexpected whether for sense us that, season that trying seeing I

John Dacey

specific there close quarter. from What way of not worked have than we But any that have for the fourth a not other our will QX, and can’t quarter, smaller then of do natural right catastrophes course say other and can itself, of quarter. if major those than the robust done that, are of secure losses $X.X incur So might a that in if we ultimate are new same might than we nat moment, number information are cover no given believe any we is budget the notifications further in there at indication is think the then through. that the are billion to I the predict expected where month any billion the $X.X they some we losses of be fourth the If they through. reservations although, which during through end are hurricanes, the clients through are of if subsequent are work have world come on guidance hurricane the fine. around a we actually losses bigger, pretty now that losses or There the we this $X.X season. the that first is, through more field the come estimate We comes cost in better we so fine, and cat expect I even quarters. we were of to adequate will that’s no billion

Unidentified Analyst

Okay. Thank you.

Elena Logutenkova

Maria. Thanks,

please. question, take Let’s next

Operator

next ahead. line with Usmoniter go Jonas of the [ph]. The question comes Toshijo Talber from Please

Unidentified Analyst

Ian on morning. divided it’s or catastrophe like cats. nat just losses, different And me, on see nat I for Good didn’t the Yes. how

the is much the how have great? third for nine the rise great? have would me, sector Thanks. you much So much And could came give right for maybe in in catastrophes how and billion $X.X insurance prices that would any on now your market the additional how you German quarter, auto your be for the to be and first months, expectation other do can clients, you -- this that

John Dacey

Yeah.

say, the through, listed have coming you overall, of event $X.X -- as we the by major billion losses far there. So Ian

first event are In addition, Northern flooding June, including an in losses, France for major million, in now Germany. and there storms big Europe, storm South the us in there hail some floods quarter, another over losses in Africa, Europe were in Australia including of in major are $XXX loss which February

the through You go size. list and decreasing

think this of view is I our our a lot is business.

that the losses, significant an for totality portfolio. received which $X.X outsized doubt our of just of the -- for it’s this have We nat remains the absence year below cat created loss, we billion expect has premiums a the

but So we in expected, combined at in door higher it’s while cat, ultimate the these what came it’s for the losses. premiums happens moment, fourth the what the lower on to than that than nat quarter, the ratio cover will is depending see the

will at where sort we is are. this I our But think, business. we full year So again, the out

like higher years have this than it’s expected. will We where

where actually respect a has when the much policies higher the it’s to German market years With risen We motor were will markets all XXXX in written. cost like is claims where any lower the expected. than market, like expectation world have pretty this auto than

this to the is to to basis. we how the reflects in the speak new addressed that to far have to pay companies, expect have equilibrium adjust These we of of the expensive primary but which say expectations that $XXX primary will certainly these adjustments rates going in for they the for businesses exactly costs reflected their cost made when we repair you premium deliver to be to to that think also premiums understand cost are and million market what reinsurance going be of more a benefit have companies on the of on replacement. your need their just a get global the I But of us forward inflation. so to and we a in to insurance basis clients they

have up of increases. of our that XX%, of indication well XX% you an magnitude but up these some costs are inflationary acknowledged the as made prices the X We adjustments our and required. expected gives at July material We renewals were were that that

Unidentified Analyst

Thank you very much.

John Dacey

Thank you.

Elena Logutenkova

you, Jonas. Thank

take Let’s please? question, next

Operator

Instructions] follow-up [Operator Mr. with Intelligence. ahead. Global have Please a Dyson S&P We from Market go

Ben Dyson

Thanks Yeah. for follow-ups. the taking

significant expecting just there some Just X have types wondering really was liability reports a a of renewals, increase was I of portion level just what might to in because of MAX quick quick on have could just the the would of exposure if wondering of is. from wondering, one of or another be press that are unhappy have January to I was one if any as And colleagues increases could you go Swiss with of that in what sort you order claims my out, the you what well, then the some you increases. mentioned you prices there? elsewhere if moved seasons of Re’s that and Boeing are up magnitude indication been claim. that give expecting I the XXX say

John Dacey

a With marketplace, see and of in includes transferred loss space which fatigue, in think or that includes our by to of and on that the to in a good January number not So price expect cost a frustration reflects risk have participants being what We they in announced events. understand to these we will the but discussions first imbalance to which a X ILS view reduction is for earlier, January be as reinsurance that marketplace, we fairly in large just important mentioned capacity I is top but what think, that on a, make but And to X. an have on from adjustment, increased all what respect increase an that with are with we from and radical the in sort that expectations, of for pre-Ian into which that get go comment prices. the for in second mean insurance future to we we what disequilibrium asset of based individual and the Asian for true reinsurance which loss, third-party a adjustment this your out respect also cover I capital all any question, to prices is reflect exposures and preannounced evolutionary understand events I and the to increase cat sort future values corporate risks the nat question tail the and and margins renewals, it’s some XXXX. becoming industry might can primary up means demand say clients is sure appropriate would but magnitude losses, is an of supply/demand show we companies we models the expectation broadly also rather on disequilibrium on classic my can’t will seem the specifically we not of

Ben Dyson

Okay. you Thank very much.

Elena Logutenkova

Thanks, Ben.

question, take please? Let’s next

Operator

are at for closing remarks. you more no questions this time. to There Back

Elena Logutenkova

today. much you everyone Thank very right. call All the for joining

reach If to you have further you. any Thank Relations. Media Good-bye. out questions please

John Dacey

Good-bye. you. Thank

Operator

Thank over. gentlemen, now Call conference. the and Chorus you thank is you for and for the in participating conference choosing Ladies

disconnect now may You your Good-bye. lines.

Swiss Re (SSREF) 29 Oct 222022 Q3 Earnings call transcript